Outsourcing's Education Gap

One question comes up often in Vivek Wadhwa’s discussions with students: What jobs are ”outsourcing-proof”? In 2005, Wadhwa, executive in residence at Duke University’s engineering school, tried to find an answer. His research team looked into the number of engineers China and India graduate and how competitive they were compared to U.S. grads.

The answers to both questions are surprising. First the numbers: Popular reports of India and China graduating 12 times as many professional engineers as the United States are way off. Considering only four-year professional degrees, the researchers found that the United States awarded 137 437 compared to 112 000 in India, while China reported 351 537, using broad criteria.

The report’s crucial insight had to do with quality. In interviews with government and university officials, Wadhwa’s team found rampant unemployment. Yet in interviews with multinational companies that employed engineers, they heard frequent complaints about not being able to find quality engineers.

This paradox, the researchers concluded in a report in the January 2008 Journal of Engineering Education, implies that the countries have ”an oversupply of all engineers, while an undersupply of globally competitive engineers.” As it turns out, India and China have similar education systems that have historically emphasized book learning over practice, deep technical and math focus over creative thinking, and quantity over quality, though the underlying reasons are different.

The two countries have excellent institutions producing world-class engineers. Only the top 3 percent scorers in the national entrance exam get into the elite Indian Institutes of Technology. About 40 universities in China enjoy elite status thanks to the government’s 985 Project, which funneled billions of yuan to establish research centers and improve education. China awards the second-highest number of science and engineering doctorates in the world and is rapidly catching up with the United States, according to the National Science Foundation.

However, says Wadhwa, these elite institutions’ graduates are no better than average American graduates from his own university, Duke. And as you move down the ladder from these top establishments, education quality declines steeply.

Lower-tier colleges and universities in both India and China suffer from passive learning styles. Design and project work is typically absent, the curricula do not focus on problem solving or building project management and communication skills, and there are no internships or other work experience. ”Engineering education is much more theoretically oriented, and students don’t really get this fully blended education that allows them to think outside the box,” says Denis Simon, a professor at the Pennsylvania State University School of International Affairs, who focuses on technology and education in China. ”They haven’t had the interaction with real live engineering that grads here have, so they’re very green when they come into the workplace.”

Wadhwa adds that the quality of the educators is very poor, and there’s not enough depth or funding. The main problem, though, is the sheer mass of students enrolled in engineering classes. ”When you have 100 students per teacher, you really can’t get hands-on and be interactive,” he says.

In China, where nearly all the universities are public, a top-down push for ”mass education” in 1999 traded numbers for quality. The number of engineering bachelor’s degrees awarded jumped by 225 percent in a decade. ”In many cases they didn’t add enough teachers or the teachers weren’t qualified, or the funding didn’t increase for all schools and universities equally,” Wadhwa says. ”The government wanted more engineers, so schools gave them engineers…even technicians were called engineers.”

By contrast, India’s growth has been market driven and from the bottom up. According to a Chronicle of Higher Education article, the number of private engineering colleges in India rose from 222 to 1116 between 1991 and 2005. Quality was not ensured, but business leaders and U.S.-based academics are trying to change that. The Indo-U.S. Collaboration for Engineering Education, a group formed by the American Society for Engineering Education, is working to improve teaching quality at small Indian colleges. Information technology firms based in India, such as Tata Consultancy Services and Wipro Technologies, meanwhile, have developed their own accreditation system and are refining curricula and providing graduates with technical and management training.

That industry involvement gives India an edge on China. The Duke researchers find that multinational engineering firms typically hire from 10 to 15 universities across China, whereas in India they hire top graduates from second- and third-tier colleges. ”American companies aren’t hiring much in China,” Wadhwa says. ”Even Chinese companies have a hard time getting middle managers and engineers in China.”

Students worried about finding outsourcing-proof jobs can relax, at least for now. Wadhwa’s study shows that the dragon and the tiger still have a lot of catching up to do. A 2005 McKinsey Global Institute study agreed. It found that 10 percent of Chinese engineering grads were qualified to work in multinational companies as opposed to 25 percent of their Indian counterparts; that figure was 81 percent for U.S. grads.